China’s Foreign-Bank Rules Set For Change Amid Concerns – Rick Carew

From The Wall Street Journal:

Revised rules that have stirred concern about foreign bank operations in China are expected to be issued by the State Council, China’s cabinet, in November and may take effect around Dec. 21, a foreign bank official said Friday.

The proposed rules have prompted concern as they will force foreign banks to restrict business in China unless they take the potentially costly step of incorporating their local operations as Chinese entities.

Chinese officials met with representatives of 30 foreign and joint-venture banks Wednesday to discuss the draft rules, according to a notice the China Banking Regulatory Commission sent to the banks. The draft requires foreign banks to incorporate their local operations in China as a China-registered company and capitalize the entity with at least one billion yuan ($125.4 million) if they want to do retail business in the Chinese currency, the notice said.[Full Text and Subscribors Only]

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